Credit Card Debt – Dealing With Debt Collection Agencies

How to Deal with Collection Agencies and Credit Card Debt

Having mountains of debt can be extremely stressful. You have mountains of credit card debt with no end in sight. You fall further behind on your payments, and you cannot make the payments. When you stop making the payments, your phone starts ringing from creditors wanting the money you owe. Credit cards quickly become a nightmare and cause much anxiety. Eventually, debt collection agencies start calling, and they will not let up. If you suffer from credit card debt and have debt collection agencies calling, you need to learn how to deal with these collection efforts.

Statistics show that more than 75 million individuals have debt that is in collections. More than 35% of people in the country have delinquent debt. Collection agencies buy this debt. This debt has a negative impact on your FICO score. The credit payment delinquencies will remain on your report for seven years. This past credit debt makes it difficult for you to obtain a new credit card, and your interest rates will be higher. Sometimes we ignore the warning signs of credit debt and then before we know it debt collection agencies begin calling.

Calls from credit card debt collection agencies can be stressful.

Don’t Let Calls From Credit Card Debt Collection Agencies Stress You Out

When your credit card debt or other types of debt becomes more than 30 days late, the creditor might report it as delinquent. Usually, after six months, your creditors will probably stop attempting to collect from you; they usually sell the debt to credit card collection agencies.

You will still owe the money. The bills you receive will now be from one of the debt collection agencies. If you have collection agencies bugging you because of credit card debt or other unpaid debt, it is important to remain calm. Do not panic. You should not pay them money you do not have just because they keep calling and you want to get them off your back. You need to think things through and explore your options.

How Credit Debt Collection Agencies Make Money

Debt collection agencies make money when creditors sell your debt to them. They will collect fees or purchase the debt inexpensive. They will collect the debt by reporting your debt to the three credit bureaus (Experian, Equifax, and TransUnion) and sometimes suing debtors. Thankfully, collection agencies are not allowed to have access to your bank account or garnish your wages.

There is a statute of limitations on credit debt

There is a statute of limitations on credit debt. The statute of limitations on credit card debt collections varies by state. At some point, debt collection agencies can no longer attempt to collect the debt. They either need to dismiss it or sue you in court. No debt collector likes to sue, as it is extremely expensive, so most companies only sue for larger amounts.

your debt collection agency may sell the debt to another collection agency

A debt collection agency might sell the credit card debt numerous times; therefore, it is hard for them to keep all the records. As the debt passes around among debt collection agencies, the amount owed might contain errors.

Request a Letter From Your Collection Agency Detailing Your Credit Card Debt

It is a good idea to ask for a letter of validation from the collection agency. This letter will probably consist of details regarding the debt. The credit collection agency is now in charge of the credit card debt. If you owe the debt, collect records about the original creditor and any payments you have made. Any correspondence you have with the creditor or collection agency needs documentation. If you send any letters, use certified mail.

The Fair Debt Collections Practices Act Protects Your Rights

Fortunately, federal laws remain in place to protect consumers from unfair debt collection practices. The Fair Debt Collections Practices Act talks about your rights with dealing with debt collection agencies. You have the right to send a cease and desist letter that states that the debt collection agency is not permitted to use bad language, harass you, or threaten you. A debt collection agency is not allowed to give you false information, and they cannot threaten to have you arrested. You can challenge the debt within the first 30 days after the debt collection agency has contacted you.

How to Deal With Credit Card Debt and Debt Collection Agencies

If you feel that you owe the debt, there are a few ways you can handle the situation. You can just decide to pay the debt in full. Credit debt full payment can stop the collection calls, and you can start to rebuild your bad credit history.

However, many people do not have this option because they just do not have the funds. In this case, try negotiating with the collection agency. Also, try coming up with a repayment plan to pay the credit card debt. In some cases, you might be able to negotiate to get late payments removed or interest rate reduced. You could create a list of reasons why you are unable to make your payments. The debt collection company would rather get some of the debt than none of it. Furthermore, it could be wise to tell the collection company that you are trying to avoid bankruptcy.

Get Help from a debt settlement company

When your credit card debt is uncontrollable and has been turned over to one of the debt collection agencies, asking for help is an option. Numerous debt settlement companies will help you get out of debt and live a debt free life. These professionals have experience in dealing with a debt collection agency, and they will do all the work. It is important to make sure you choose a reliable and reputable debt settlement company.

Dealing with debt collection agencies can be unpleasant. When you have credit card debt, your phone rings nonstop. The collection agency will not quit asking you for money. They will test the limits of the law, and they can be aggressive while doing it. If your credit card debt has been turned over to a collection agency, you need to know your rights. Finally, do not let them control your life.

Monica Kowollik

Director at CreditFast.com
Monica has covered credit card and personal finance news for over 15 years. From an early age, she developed an interest in financial literacy and saving money. Monica hopes to help others to improve their personal finances one article at a time.

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